The Cost C(q)(in Dollars)of Producing a Quantity Q of a Certain

question 76

Multiple Choice

The cost C(q) (in dollars) of producing a quantity q of a certain product is shown in the graph below.The average cost is given by $a(q) =\frac{C(q) }{q}$ .Find on the graph the quantity $90$ where a(q) is minimal.Now suppose that the fixed costs (i.e., the costs of setting up before production starts) are doubled.Sketch the new cost function $C_{1}(g)$ on the same set of axes as the original one and let $q_{1}$ be the quantity where the new $a_{1}(g)$ is minimal.Which of the following is true?

• A) \(q_{0}\)\(<\)\(q_{1}\)
• B) \(q_{0}>q_{1}\)
• C) \(q_{0}=q_{1}\)
• D)Cannot be determined

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